ownership of the industrial j equipment. Roughly speaking, under corporate organization the owners of the industrial material have no voice in its management, and where preferred stock is a large constituent of the capital this alienation of control on the parts of the owners may be, by so much, irrevocable. Preferred stock is, practically, a device for placing the property it represents in perpetual trust with the holders of the common stock, and, with certain qualiBcations, these trustees are not answerable for the administration of the property to their trustors. The property relation of the owners to their property is at this point attenuated to an extreme degree. For most business purposes, it should be added, the capital covered by other forma of debentures is in
organized in a, conBerrative but np-to-date manner for permanent sncoesB and stable value. Its autliorized L-utue of stock la 925,000,000 T per cent, cumulative preferred, and $25,000, D0() commoti. The actual iMue In 1901 was aboat $8,000,000 preferred and S1T,000,000 commoo, ol which the preferred wna preaumed to cover the value of the tangiblB amets. Another coalition organized b; the antne promoter (Mr. C. R. Flint), the American Chicle Company, illuatratea the same general feature. The preferred slock ot tliU company (43,000,000) "in round numbers was three times the amount of taugihle aaaels," while Che common slock (96,000,000) represents no tangible asseta. The aggregate capilolization is about nine times the tangible assets. The w neM saya that this corporation has been proved by events to be " a eonaervative basis from the fact that tlie company has paid S per cei on its common stock," which baa been selling at BO, — Seport of lk» InAiMtrial CommitsioH, vol. XIII. pp. 47, 60.
MODERN BUSINESS CAPITAL 147
much the same position as that covered by the preferred stock.^